April 23, 2025

USDCAD: open 1.3805, overnight range 1.3798-1.3861, close 1.3815

USDCAD peaked in early Asia trading then declined somewhat choppily into the New York open. The price action is tied to the prevailing US dollar sentiment, but USDCAD is able to outperform vs Europe and Asia because Canada avoided some of Trump’s tariffs. The steel, aluminum, potash and lumber levies are still intact, but Trump is sticking with the auto-pact ….for now.

WTI traded in a 63.78-64.87 and is in the middle of that band in NY. The International Energy Agency IEA) warned that oil prices may decline further in 2025 because of rising production and falling China demand.

Canadian Housing Starts were flat in March and unchanged year over year. The US releases New Home Sales.

USDCAD Technicals

The USDCAD intraday technicals are bullish while prices are above 1.3790 and are looking for a break above resistance in the 1.3860 level to extend gains to 1.3950.  A break below 1.3690 risks further losses to 1.3720. Prices are consolidating after finding support in the 1.3650 area and momentum indicators suggest USDCAD is oversold.

Longer term, USDCAD technicals are bearish below 1.4000 and only a move above the 50% Fibonacci retracement level of 1.4110 will negate the downside risk.

For today, USDCAD support is at 1.3790 and 1.3760. Resistance is at 1.3860 and 1.3890.

Today’s Range: 1.3790-1.3880

Chart: USDCAD 4 hour

FX at a Glance

Trump Making Nice with Jay
President Trump finally acknowledged (in that unique Trump way) that his attack on Fed Chair Jerome Powell and the massive tariffs levied against China were wreaking havoc across global financial markets. He got the hint when he realized that Wall Street stocks, bonds and the US dollar were in free fall.
So, without batting an eye, he said “I would like to see him be a little more active in terms of his idea to lower interest rates… but, no, I have no intention to fire him.” That is a complete about-face from what he said 6 days ago (Powell’s termination could not come quick enough), and then calling Powell a “loser” and “Mr. Too Late” on Monday.
Then he went on to say that the 145% tariffs on China are “very high” and would come down substantially.

Traders Ignore IMF Warning
The IMF released its latest update to the World Economic Outlook. It was not pretty. The IMF cut growth forecasts for the US, China and most other countries and cited tariffs as the reason. Traders ignored the warning while taking Trump at his word.
Wall Street closed strongly, led by a 2.71% gain in the NASDAQ. Asian equity indexes joined the party with Japan’s Topix gaining 2.06%, Australia’s ASX 200 rising 1.33%, and Hong Kong’s Hang Seng climbing 2.37%.
The German DAX has rallied 3.07% in European trading followed by the French CAC 40 index with a gain of 2.45%. S&P 500 futures are up 2.14%. The big loser was gold. XAUUSD touched 3500 yesterday, and is now 3329.00, reversing most of this week’s gains. The US 10-year Treasury yield dropped from 4.43% yesterday to 4.31% today.

Gold Rush Retreat
Traders who rushed into gold on the heels of Trump’s verbal attacks on Fed Chair Jerome Powell dumped the trade just as quickly when Trump backed away from his threat. Gold prices dropped from 3500 to 3292 overnight.

XAUUSD 30-minute chart

EURUSD
NY Open: 1.1418, Overnight Range: 1.1308-1.1440
EURUSD gave back all this week’s gains following Trump’s conciliatory tone about Powell and Treasury Secretary Bessent saying he expects a de-escalation in Trump’s tariff war with China. But after hitting 1.1308, prices have climbed steadily. German Manufacturing PMI was a tad better than expected (48 vs forecast 47.6) but down from the 48.3 seen in March. Hamburg Chief Economist Dr. Rubia wrote that “the US tariff policy has not caused a major slump in manufacturing, just yet.”
Elsewhere, the EU is trying to improve its balance sheet. They hit Apple and Meta with fines of €500 million and €200 million respectively for violating the EU Digital Markets Act. It shouldn’t be too long before the US fines an EU-based bank or corporation a similar amount.

GBPUSD
NY Open: 1.3323, Overnight Range: 1.3234-1.3339
GBPUSD dropped on the Trump and Bessent news, then consolidated the losses in a 1.3390-1.3337 range. UK PMI data was weaker than expected and, according to S&P Business Economist Chris Williamson, evidence that businesses are struggling to keep their heads above water.

USDJPY
NY Open: 141.88, Overnight Range: 141.47-143.22
USDJPY reversed its April decline rather spectacularly, rising from a low of 139.89 yesterday to 143.22. The swing into positive risk sentiment led to some unwinding of safe-haven yen trades. The US and Japan trade talks are ongoing.

AUDUSD
NY Open: 0.6416, Overnight Range: 0.6350-0.6425
AUDUSD shrugged off initial weakness after Manufacturing PMI data dipped to 51.7 from 52.1 in March, mainly due to tariff issues. However, Trump’s comments about lowering tariffs on China and his “about-face” on Fed Chair Jerome Powell fueled the rally.

NZDUSD
NY Open: 0.5996, Overnight Range: 0.5937-0.5998
NZDUSD extended its rally from Monday’s low of 0.5926 to 0.5998, where it is trading in New York. Improved risk sentiment from Trump’s comments about China tariffs has fueled the gains. A move above 0.6000 targets 0.6030.

USDMXN
NY Open: 19.5277, Overnight Range: 19.5365-19.6576
USDMXN consolidated this week’s losses and is at the bottom of the overnight range thanks to wildly improved global risk sentiment. Mexico dodged the worst of Trump’s tariff wrath and USDMXN is trading defensively on what appears to be the US de-escalation of its Trump trade war with China. Mexican retail sales for March are due today. The USDMXN technicals are bearish and looking for a break below 19.5000 to extend losses to 19.0800.

China Snapshot`

PBoC fix:  7.2116 (Prev. 7.2074)

Shanghai Shenzhen 300 rose 0.8% to 3786.88

FX high, low, open (as of 6:00 am ET)

Sources: Yahoo Finance, Oanda, Investing.com, Bloomberg.